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SELL YOUR HOME QUICKLYHomeowners resort to loans to cover rising mortgage costs
The soaring cost of day-to-day living is forcing consumers to take desperate measures to cover their mortgages expenses, it has been revealed. According to the Times Online, people who are unable to meet their mortgage and rent commitments are turning to short-term loans as a quick-fix solution.
According to a survey conducted by Moneysupermarket, more than 4 million households have taken out loans in order to cover their rental or mortgage expenses, the Times reports. This means that higher-interest credit cards and personal loans are now being used to pay for long-term loans – a phenomenon which not only contravenes lenders’ regulations, but which simply compounds the problem of rising debt.
Speaking to the Times, Moneysupermarket’s Tim Moss, head of loans and debt, explained that the current state of affairs was dire. “It’s a very serious situation when you have people turning to a short-term solution to fund a long-term product. Taking out a loan specifically for a mortgage goes against lenders’ rules. To be funding your mortgage repayments with a credit card that will charge you interest of over 15 percent is not the solution in the long term,” he stated.